12 important tax year changes kick in today.
They include Universal Credit, Personal Independence Payments and Jobseeker’s Allowance.
Here are the changes coming into effect this month…
The Personal Allowance is currently set at £12,500 for the 2020/2021 tax year.
In 2021/2022, the Personal Allowance will rise by 0.5 percent to £12,570.
The income limit for the Personal Allowance will remain at £100,000 for the 2021/2022 tax year.
The income limit for married couple’s allowance will rise, from £30,200 to £30,400.
For income between £12,501 and £50,000, the basic rate of Income Tax is 20 percent.
The higher-rate Income Tax threshold of 40 percent is currently £50,000, but this will rise to £50,270 in April 2021.
The additional-rate Income Tax threshold of 45 percent is currently £150,000 and this rate will remain the same for April 2021.
Pension payments are set to rise by 2.5%, which means people over the age of 66 on the full, new State Pension will receive £179.60 per week – an increase of £4.40 on the current rate of £175.20.
Anyone on the ‘old’ basic state pension (category A or B), currently receiving £134.25 each week, will be paid £137.65 – a benefit increase of £3.40. This equates to an extra £13.60 a month and £176.80 for the 2021/22 financial year.
Beginning on April 6, the new tax year will bring an increase of benefit rates including the state pension and Universal Credit.
Statutory Sick Pay
For the tax year beginning 6 April 2020 statutory sick pay rate is £95.85 per week from 6 April 2020 and is set to rise to £96.35 from 6 April 2021 (see our ‘Statutory rates’ page for historic rates). Employers can opt out of SSP if they operate their own scheme (contractual sick pay).
The current weekly rate of statutory maternity pay is £151.20, or 90% of the employee’s average weekly earnings if this figure is less than the statutory rate.
The rate of statutory maternity pay is expected to rise to £151.97 from April 2021.
During the UK Government’s Spring Budget, Chancellor Rishi Sunak announced that the £20 a week Universal Credit payment uplift is being extended for a further six months and that eligible claimants receiving Tax Credits will be given a one-off payment of £500.
For an eldest or only child, households currently receive £21.05 per week plus £13.95 for any additional children.
From April 12, this will increase to £21.15 per week and £14 per week for additional children.
This is an increase of 10p and 5p respectively per week and means the new monthly payments will be £84.60 for an eldest or only child and £56 for any additional children.
However, if a claimant or their partner earns more than £50,000 a year, a fraction of it must be repaid at the end of the tax year.
This is at a rate of 1% for every £100 earned over £50,000. If over £60,000 is earned in a year, the whole amount must be repaid.
Working tax credits
From April 6, Working Tax Credit and Child Tax Credit annual allowance rates will increase for the 2021 -2022 tax year.
Disability Living Allowance
Disability Living Allowance care component, highest rate: £89.60 (up from £89.15)
Disability Living Allowance mobility component, highest rate: £62.55 (up from £62.25)
The daily living component will rise from £89.15 to £89.60 for those on enhanced payments, while those on standard claims will see a rise from £59.70 to £60.
The personal allowance (single over-25s): £74.70 (up from £74.35).
Employment and Support Allowance (single over-25): £74.70 (up from £74.35).
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